TMI Blog2010 (2) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... ooked that : (a) The trust had a separate bank account, there was no explanation for not keeping the money there in the locker of the assessee, who at the time of search was not even a trustee of the said trust. (b) Most of the so called donors were near relatives and friends of the assessee's son-in-law (who was covered under section 132 search action) and other persons of modest means like teachers, garage owners, social workers, rickshaw owners, etc., who were incapable of making sizable cash donation. (c) No donor was produced before the Assessing Officer up to the last despite such requirement and as such the Commissioner of Income-tax (Appeals) was incorrect in holding that the affidavits were rejected merely on suspicion and assumption when an analysis of this was made in paragraph 10 of the assessment order. (3) On the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in deleting the addition of Rs. 4,50,000 representing cash deposits in savings bank account on July 19, 2000 and October 25, 2000 by accepting the plea of the assessee that the same representated donation received on behalf of the trust." The facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y members or "Mathoshri Anandibai Charitable Trust". The Assessing Officer thereafter issued a notice under section 158BC on February 5, 2002. The assessee has filed a nil return of income for the block period in response to the notice under section 158BC. In the assessment proceedings the issue was with regard to the source of cash found in the locker in the name of the assessee. The assessee was examined on January 19, 2001 when the locker was searched and in her statement she explained that the cash does not belong to her but belongs to "Mathoshri Anandibai Charitable Trust". In the course of assessment proceedings the assessee reiterated her stand that the money found in the locker did not belong to her but "Mathoshri Anandibai Charitable Trust". In support of the existence of "Mathoshri Anandibai Charitable Trust" the assessee filed a copy of the trust deed dated July 19, 1997, a copy of the registration certificate granted by the Charity Commissioner, Thane, dated January 1, 1998, a copy of the donors' list along with name and addresses together with consent letters for treating their donations as corpus. The assessee also filed a copy of the conveyance deed evidencing purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given donations to the trust. The Assessing Officer found on an examination of these persons that they were friends of Shri Ravindra M.Patil and had meagre source of income and were not capable of giving gifts to the extent claimed by them. Moreover, these affidavits were filed after the search. (f) The trust had a bank account namely savings bank account No. 9412 in Bank of Maharashtra, Ayare Road, Dombivili. This account was opened in January 1998. The donations received had not been deposited in this bank account. The assessee had claimed that the amount was kept in the locker to facilitate speedy purchase of land and construction of Vridhashram. According to the Assessing Officer there was no evidence to show requirement of cash for any immediate purposes. According to the Assessing Officer the best option that was open to the trust (assuming that it was money belonging to the trust) was deposit money in the bank account rather than keeping it in their lockers. (g) All the donations were received in cash and not even a single donation was in the form of cheque. (h) The cash found from the locker comprised of 13 bundles of 100 notes each of denomination of Rs. 500. Four bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spital. It has been stated that the appellant had given receipt for the collected amount. That these amounts were collected from July, August, 2000 onwards and that the assessee had issued receipts for the amounts collected. The claim of the assessee has not been contradicted by the Assessing Officer. (ii) In the post-search enquiry by the Investigation Wing with the assessee on January 24, 2001, the assessee had given a list of donors with complete names, addresses including their consent letters. The plea regarding the trust desiring to construct an elders' home at Dombivili was reiterated. It was also submitted that the assessee had collected donation towards corpus fund amounting to Rs. 38,00,000 out of which Rs. 5,50,000 was invested in acquiring a piece of land on October 15, 2000 which was much before the date of search. The assessee had also stated that the trust had issued proper receipts for the amounts collected in the name of "Mathoshri Anandibai Charitable Trust". This claim of the assessee had not been contradicted by the Investigation Wing. (iii) The trust had acquired a piece of land on October 15, 2000 before the date of search on January 19, 2001 from Bombay G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellate proceedings the assessee had explained that for convenience keeping of cash in locker the cash received as donations was exchanged for the bundle of notes referred to in the order of the assessment as well as in the panchanama prepared at the time of search of the locker. The assessee's explanation regarding exchange of bundle of notes has not been contradicted by the Assessing Officer in the remand report filed before the Commissioner of Income-tax (Appeals). (vii) The assessee had produced a copy of saving bank account No.10055 from which cheque of Rs. 4,50,000 was issued for the purchase of land. These cheques were received by M/s. Bombay Gogras (Bhiksha) Society. The purchase of land happened before the date of search. Due consideration for this fact has to be given. (viii) The assessee had given affidavits of 24 persons during the block assessment proceedings. Four persons had given affidavits directly to the Assessing Officer. The Assessing Officer if he did not believe the averments in the affidavit, could have summoned these persons and examined them. Instead, these affidavits have been rejected merely on the basis of suspicion and assumption. There is also m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is lack of evidence to support findings of the Commissioner of Income-tax (Appeals) addition deleted should be sustained, (3) B. C. Paul v. CIT [1982] 136 ITR 395 (Cal) regarding application of test of human probabilities. Learned counsel for the assessee relied on the order of the learned Commissioner of Income-tax (Appeals) and the submissions made by the assessee before the Commissioner of Income-tax (Appeals). We have considered the rival submissions. The assessee in support of the claim that the money found in the locker belongs to the trust gave a list of donors and submitted that the money found in the locker was donations received. The donations were evidenced by donations receipts containing receipt No., date, name of donor, address of donor and the amount given as donation. Apart from the above the assessee has also filed confirmation from 28 donors. These documents are available at pages 15 to 42 and 44 to 107 respectively of the assessee's paper book. The claim of all the donors was that these monies had been paid by them as donation to the trust. We also notice that the keys of the lockers were found in the custody of Shri Ravindra M. Patil. The assessee in the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pression "may" in the above provisions shows that it is a matter within the discretion of the officer to make or not to make an addition in a given case. The unsatisfactory explanation does not and need not, automatically, result in deeming the money found to be the income of the assessee. Under section 69A of the Act the discretion to make an addition on account of unexplained money has to be exercised keeping in mind the above fact that the assessee has no source of income. The hon'ble Supreme Court in the case of CIT v. P. K. Noorjahan [1999] 237 ITR 570 has held that unsatisfactory explanation does not and need not automatically result in deeming the value of the investment to be the income of the assessee. The discretion lies with the Assessing Officer and that discretion has to be exercised on the facts and circumstances of a given case. It was claimed on behalf of the assessee that the trust has been filing returns of income. In the course of the hearing specific question was put to the learned Departmental representative whether the cash found was added as income in the case of Shri Ravindra M. Patil or in the case of the trust. The learned Departmental representative was n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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